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FOR IMMEDIATE RELEASE |
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CONTACT:
Victoria L. Stanish |
State Rep. John
Yudichak |
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Yudichak introducing bill to oversee higher ed. lending practices
HARRISBURG, June 20 – State Rep. John Yudichak, D-Luzerne, is introducing legislation that would provide further oversight of higher education lending practices in Pennsylvania.
“Recent investigations by New York Attorney General Andrew Cuomo and others have uncovered troubling activities in this industry. It is unconscionable that anyone charged with assisting students would exploit them for financial gain or other ulterior motives,” Yudichak said.
The bill would:
- prohibit lenders from making gifts – including revenue sharing – to colleges and universities or their employees in exchange for any advantage in loan activities;
- prohibit colleges and universities from soliciting, accepting or receiving such gifts;
- prohibit college and university employees from receiving any advantage, reimbursement or benefit from serving as a member of a lender’s advisory board;
- prohibit lenders’ employees and agents from posing as college or university employees, including staffing the schools' financial aid offices or telephone lines with lenders’ employees; and
- prohibit schools from linking or directing potential borrowers to any electronic master promissory notes or loan agreements that do not allow students to choose the lender offering the relevant loan at that guarantee agency.
Yudichak said some of the discrepancies Cuomo discovered in an ongoing investigation of the $85 billion student loan industry include colleges receiving a percentage of loan proceeds from lenders that have been given preferred status by the schools, and recommendations to use those lenders given to students.
“We need to improve the integrity of the student loan system to protect students and their families from being fleeced,” Yudichak said. “These loan agencies are supposed to be making it easier for students to get an education. Instead, many students are being pushed further into debt because there’s no guarantee that the companies being recommended to them for loans actually have the lowest rates.”
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